tv Squawk Box CNBC December 18, 2009 6:00am-9:00am EST
speech, i think she must have been on her blackberry. david plume send me through every day. i get stuff from senator john kerry. and they always talk to me like i am a zealous foot soldier. whoever did it, it was a pretty good joke. >> welcome. you've got mail. >> and they send stuff back, do you want this to -- and i send back, yes, i do want. but they never answer. palm reported a wider than expected second shares loss. that is a bit of a met for, although palm did make it from 2 back to 18 at one point. the company is reporting a loss of 37 cents a share compared to the 32 cents the street was looking for. revenues were up to $300
million. did you see where the euro is today? >> is it below 1.45? >> yeah. 1.43. >> really? that's interesting. >> tith to sleep one night and make the really, two beaks. >> looking up, do you tie it to some of the greeces on the world. >> bit happened right after the federal reserve came out with their -- yeah. i market, as we pointed out, it's been quiet, not a lot of -- >> yesterday it was a little -- >> it was. but we're still at 10.3 how long with the carry trade, babe, the number of stocks above their 2
hin dae average. >> even though she's well above son census on those numbers. >> it remind me of the way i felt. don't we have -- we have a leading sue sayer on today, don't we? >> byron wean? >> he is kind of a dinosaur, but -- well, he's been on our street a long time. he was here when there was global cooling. >> but he's been very right over the course of the years. >> bullish. >> yeah. >> some of his predictions are -- >> and he's probably getting ready for the 2010 predictions. theater. a programming note for you, the president is in copen cage b.
there ever been reports that he has somehow exchanged his schedule to gave save a deal with all the freezing know and the gloushl summit. >> those who say there's global warming never said there wouldn't be snow again. >> wasn't it the lowest year ever for that kind of stuff, too? >> you would never -- you yourself say that kind of sample is data does not mean. >> that doesn't mean i'm going to say it. whenever this is a climatat meeting, it's snowed out. >> john terry told us the other
day eats rules. >> we'll leave it on that note, then. r.i. mrmpt and palm are joining us right now. why don't we start out talking a little bit about r.i.m., mike, because these numbers came as a major surprise. what happens? >> yeah. they blew out expectations with a lot of pessimism going into the corner, given concerns over competition and the impacts thereof. he showed up strength and i refused some of those things you're seeing about val you onation right. it was up by more than 12% at one point in the after hours yesterday. do you look at that and think this is still a significant buying opportunity or do you worry that the gains have been baked in? >> no, no.
there's still quite a bit of overhang from excessive concerns that we think offers upside from these levels and the stock is trading -- last night, it was trading for the up side probably around 12 to 13 sometimes, 1414 sometimes. and that is compared to growth well into the mid 20s and foreca forecast. so given relative humidity's credit positions is probably one of the most exacting markets. >> did this mean that iphone and the blackberry with do exist and be very successful for them? >> you mean cats and dogs living together? >> yes. >> it's not that they don't purely compete because rim has a
storm that lags the iphone in many ways. we have an overform at apple. we're basically on the iphone and its strength in the market. but we think there is an opportunity and this is where investor res potentially missing the upside by focussing on too much on google versus r.i.m. versus apple. they miss the upside a lot of them have to pen straight their observe intoont turret than expected. what about fine, though? is that where usz the competition getting quited out. but i think clearly the.
they have to get better known. and we're expecting a large carrier announcement in q1, possibly in early january, is key to that awareness. that is what gives r.i.m. so much comparability as compared to palm. >> but is palm able to ten trid this moempths. it's easier for forward to achieve that saturation. palm only needs about 8% or 9% of the global set market at a decent margin, which it will ultimately get to in our view to exceed our target. and so palm needs to find its sow and it if find as soon as
you get they are carriesier deals. >> which one of these stocks is your favorite? >> r.i.m., we think those fears are overdone and this is a good opportunity and a good idea for 2010. okay. . mike, thank you very much. it's great talking to you. we'll see you again soon. >> carl, mike writes, joe is complaining about all the spanl that i was getting. it may be be, it mate just too dark. >> the cop is expected to be aga and usually, system abdomen with were strong,.me not?
>> good morning. me got benefit of currency ahead of expect actions. we had expected future owners to be down about 2% in constant dollars. they were actually down one. but in reported dollars, they were up four, which is a benefit that we didn't expect primarily driven by future orders at western europe. okay. kwor note can he are we talking about that cause tess numbers to grow. we're seeing increasing penetration in foreign markets. the u.s. futures were down 4% and we have some -- we have a neutral rating on the stock. we think that there's some issues long-term mere in taking interests downgrades too expect. and we expect that to continue and that's why why any much to
do about it at this level. >> in the last couple of years with the economy, has that become a benefit that you can buy them for less than premium prices? >> well, the premium product is selling at premiums prices. there are others in the market offering better prices there. i think the consumer is getting smart and on a price value relationship, some of the prices you can find on the family footwear channel is and so on has more value than some of the premier product such as the air jordans, air force one shocks and so on. but very haven't come up with a new, come spelling product. >> yau, but a market cap, this is the largest apparel company in the world, isn't it?
it's right up there if it's not. >> so when do they run into the problems with scale and just, you know, trying to continue to add 0% or 20% a year? it seems like you run into a wall sooner or later, don't you? >> i think you're right. but for the ner term, look at the at these opportunities. but -- and then down again in central and central europe, they're having is some economic news there. we are concerned that sort of the cool of the nike brand can be diminished by a going down market as they've been forced to do in the united states. and that is what i think will hurt them over time with that strategy. >> do you see any risk to anything at nike from the tiger woods fallout? >> well, i think, you know, the golf business is around $650
million. they don't wrak out how much is equipment having public vaift however, apparel, aaron's, kids starter sets. but i believe for the nike brand, it's still to be determined. tiger woods is their largest celebrity. but they still have people like kobe bryant, lebron james and so on that are quite large stars. he would negative this won't happen again. >> and nike, you know, i asked get mail when i talk about it. mikey is more guys smo .extent.
>> i agree. u bing you have to look at children growing up. i grew up on another brand jut because nike wasn't around when i was a kid. and you have to think that there may be other opportunities for companies like this. moerchb apparel is making some moves, as well. so i think we're at a critical time in this business because nike has been on a straight run up for the last 20 plus years. >> right. well, if she file eggs after christmas, she hoob -- you don't even wait for the masters at this point. >> then wooirnt putting this back together. deal with it. 50% of marriages end in divorce.
it's sad for the kids. the kids are going to have about $400 million. >> this might be the first nike segment with where he talk about divorce. >> thank you. pe appreciate it. >> in the headlines, the financial industry regulatory has haunsed a probe at how banks offering tocksings and research also, president obama's auto czar says the sxwrrg wrorts and chrysler will some good shape. ron bloom says the u.s. is hopeful that auto sales were improve in 2010. the treasury is hopeful that gm might move back in in july of
2010. >> i think they said they would make every reasonable attempt. >> yeah. >> to look at citigroup, we will serve no wine before its time, what is that? >> yeah. >> but that was one of the things that he got mad at fritz henderson in the first place. >> come back out too soon, yeah. >> and whitacre took control, too charge. coming up on "squawk box," head owed to do president where he's trying to convince world here everies about emissions. as we head to break, it's freezing in copenhagen. look at yesterday's winners & losers.
also, jp morgan chase is this year's top underwriter of initial stock offerings. that is nearly double last year's figure. bank of america came in second followed by goldman sachs in third place. world leaders congress degree gating for a final day. the president arriving early this morning. john harwood is in copenhagen following the day's events. john, the headlines are flying, at least on this side of the pond saying that there are all these last-minute meetings. they're scrambling to put together a deal. china is going to honor its commitment. what is going on? >> well, we don't know because a lot of these meetings, most of the important meetings, of course, take place behind closed doors. we just heard from chinese premier wen jiabao. now you've got the president of brazil speaking. we're waiting to hear from president obama. but i've got to tell you, there's increasing pessimism on
the u.s. side that they're going to achieve a meaningful agreement, which would be if, in fact, they're unsuccessful, would be a blow to president obama and a blow to the efforts to get climate change legislation to the u.s. senate which advocates are hoping to do next year. >> we've heard some comments from robert gibbs and others saying it would be better to come back with no agreement than an agreement that's empty. is that a way of setting expectations a little bit lower as we go into the weekend? >> absolutely. and what i'm hearing from u.s. officials is that the negotiations proceeded overnight, they were looking at potentially an eight or nine-page draft agreement that would have some undetermined level of specificity, but might be able to paper over some of the differences. now what we're hearing is that the talks this morning may have kicked things into reverse or failed to make progress on that and, in fact, that draft agreement may be shrinking and be a very, very general and
generic document which would not be seen as a successful outcome of these talks. but, of course, it's not over yet because the president is still expected to hold a bilateral meeting with wen jiabao of china. that is the key meeting here. everybody thinks that the prospects for a deal come down to the g-2. >> are you surprised by all this, john? for a while, it looked like the summit was going to have some teeth, and then we realized given our own legislative limitations, it was going to be less, but then the chinese came back with a target that's relatively aggressive. it's been a real seesaw. >> it's been absolutely a seesaw. and yes, i've been surprised at different phases. i was in beijing when the president went a few weeks ago and he seemed to come out there with a general statement with we know jaw because and people said, well, he hasn't cut a deal for china.
then a few days later, the chinese came out with their target. the united states put a target on the table of 17% carbon emissions reduction by to 2020. so we've had a whipsaw up and down, but it's very, very difficult and the chinese appear to have dug in on this issue of transparency. also perhaps using it as a bargaining chip to say we don't want to submit to monitoring by other countries. they appeared to soften that position yesterday, but perhaps they haven't softened it enough to allow a deal to take shape. >> yeah. someone pointed out this week, john, that it really shows why the chinese are the best negotiators in the world. they really only cut a deal when they're convinced you're going to walk out of the room and play out over the past couple of days. >> well, and hillary clinton came here td yesterday and tried to break that logjam and perhaps divide the developing countries by saying the united states
would participate in raising $100 billion a year which is real money by 2020. that shifted the tone of things yesterday. but we'll find out over the next few hours whether it's enough so that china would compromise on transparency, the united states to financial aid to developing countries and everybody could agree to target for the entire world, near term targets that would have teeth in them over the next few years. >> john, what the heck are you standing in front of? what are all those people on the -- >> you mean those bizarre people behind there? with the big screens and the headphon headphones? >> they're not real? >> you know, they're keeping watch over this incredible u.n. circus that is unfolding in copenhagen. you've got tens of thousands of people here in various capacities. protesters, nongovernmental organizations, official delegati
delegations, journalists, everybody trying to figure out exactly what it all adds up to. by the end of today, president obama gets back on air force one and goes back, maybe we'll know more. >> and the paparazzi hoping to get -- >> you mean me or the guys behind me? >> the guys behind me. they haven't moved. >> that one is being pretty still, too. >> i don't know what their beef is. >> poor cnbc. >> hey, joe? joe? are you going to be -- >> oh, you know i am. you know i am. >> tell him to not hold it in december because watching the president get off the plane -- >> what is the temperature over there, john, today? have you noticed? it's not that cold. i'd say it's in the mid 30s. >> it would be a lot colder if it wasn't -- >> i won't have any work to do when i come back because health care will be all wrapped up,
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estimates. but palm lost 37 cents for its latest quarter, including some one-time items and that was 5 cents wider than the street had anticipated. sales of smart phones declined. shares down more than 6% in after hours trading. >> also, video gamemaker take two inter active matching estimates with its latest quarterly earnings. but the more notable news concerning take two was that it has a new major stakeholder. we're talking about carl ikahn. he is seeking talks with company management. you know what that means when icahn gets involved. he very rarely is quiet about things. all of these video gamemakers have gotten pummeled lately. >> one more entry for earnings central this morning. nike earning 76 cents a share for the quarter, about five cents ahead. results were lower than a year
earlier as consumer spending did remain sluggish around the globe. the president, as you know, is in copenhagen and is about to speak, i believe. we've been waiting for his remark hes. he's been holding some emergency meetings. here is the president of the united states. >> good morning. it is an honor for me to join this distinguished group of leaders from nations around the world. we come here in copenhagen because climate change poses a grave and growing danger to our people. all of you would not be here unless you like me were convinced that this danger is real. this is not fiction, it is science. unchecked, climate change will pose unacceptable risks to our security, our economies, and our
planet. this much we know. the question, then, before us is no longer the nature of the challenge. the question is our capacity to meet it. for while the reality of climate change is not in doubt, i have to be honest, as the world watches us today, i think our ability to take collective action is in doubt right now. and it hangs in the balance. i believe we can act boldly and decisively in the face of a common threat. that is why i come here today, not to talk, but to act.
now, as the world's largest economy, and as the world's second largest emitter, america bears our responsibility to address climate change. and we intend to meet that sxonlt. that is why we've renewed our leadership within international climate change negotiations. that's why we've worked with other nations to phase out possible fuel subsidies. that's why we've taken bold action at home, by making historic investments in renewable energy, but putting our people to work, increasing efficiency in our homes and buildings, by pursuing comprehensive legislation to transform to a clean energy economy. these mitigation actions are ambitious, and we are taking them not simply to meet global
responsibilities. we are convinced, as some of you may be convinced, that changing the way we produce and use energy is essential to america's economic future, that it will create millions of new jobs, power new industries, keep us competitive, and spark new innovation. we're convinced for our own self-interests that the way we use energy, changing it to a more efficient fashion, is essential to our national security because it helps to reduce our dependance on foreign oil and helps us deal with some of the dangers posed by climate change. so i want this session to understand, america is going to continue on this course of action to mitigate our emissiones and to move towards a clean energy economy, no matter what happens here in copenhagen.
we think it is good for us, as well as good for the world. but we also believe we will all be stronger, all be safer, all be more secure if we act together. that's why it is our mutual interest to achieve a global accord in which we agree to certain things and to hold each other accountable to certain commitments. after months of talk, after two weeks of negotiations, after innumerable side meetings, bilateral meetings, endless hours of discussion among negotiators, i believe that the pieces of that accord should now be clearer. first, all major economies must put forward decisive national
actions that will reduce their emissions and begin to turn the corner on climate change. i'm pleased that many of us have already done so. almost all the major economies have put forward legitimate targets, significant targets, ambitious targets. and i'm confident that america will fulfill the commitment that we have made, cut b in the range of 17% by 2020 and by more than 80% in by 2050 in line with final legislation. second, we must have a mechanism to review whether we are keeping our commitments and exchange this information in a transparent manner. these measures need not be intrusive or infringe upon sovereignty. they must, however, ensure that an accord is credible and that
we're living up to our mutual obligations. without such an accountability, any agreement would be empty words on a page. i don't know how you have an international agreement where we all are not sharing information and ensuring that we are meeting our commitments. that doesn't make sense. it would be a hollow victory. number thee, we must have financing that helps developing countries adapt, particularly the least developed and most vulnerable countries to climate change. america will be a part of a fast start funding that will ramp up to $10 billion by 2012. and yesterday, secretary hillary clinton, my secretary of state, made it clear that we will engage in a global effort to mobilize $100 billion in financing by 2020 if and only if
it is part of a broader accord that i've just described. mitigation, transparency, financing. it's a clear formula. one that embraces the principle of common but differentiated responses and respective capabilities. and it adds up to a significant accord, one that takes us farther than we have ever gone before as an international community. i just want to say to this plenary session that we are running short on time. and at this point, the question is whether we will move forward together or split apart. whether we prefer posturing to action.
i'm sure that many consider this an imperfect framework that i just described. no country will get everything that it wants. there are those developing countries that want aid with no strings attached and no obligations with respect to transparency. they think that the most advanced nations should pay a higher price. i understand that. there are those advanced nations who think that developing countries either cannot absorb this assistance or that will not be held accountable, effectively, and that the world's fastest growing emitters should share the burden. we know the fault lines because we've been imprisoned by themselves for years. these international discussions have essentially taken place now for almost two decades.
and we have very little to show for it other than an increase, acceleration of the climate change phenomenon. the time for talk is over. this is the bottom line. we can embrace a greater cord, take a substantial step forward, continue to refine it and build upon its foundation. we can do that and everyone who is in this room will be part of a historic endeavor, one that makes life better for our children and our grandchildren. or we can choose delay, falling back into the same divisions that have stood in the way of action for years, and we will be back having the same steal arguments month after month, year after year, perhaps decade
after decade, all while the danger of climate change grows until it is irreversible. ladies and gentlemen, there is no time to waste. america has made our choice. we have chartered our course, we have made our commitments. we will do what we say. now i believe it's the time for the nations and the people of the world to come together behind a common purpose. we are ready to get this done today, but there has to be movement on all sides, to recognize that it is better for us to act than to talk. it's better for us to choose action over inaction, the future over the past. and with courage and faith, i believe that we can meet our responsibilities to our people and the future of our planet. thank you very much.
>> president obama speaking in copenhagen this morning. he's delivering a bit of a lecture to the world community on climate change, saying although the science in his view is not in doubt, the collective will of nations around the world to act in response to climate change is in doubt. our john harwood is in copenhagen. a quick comment from you, john. even though he is admonishing all these countries to get their act together, he sounds prepared for copenhagen to end without any kind of deal. >> well, that was a common thread in his remarks and both wen jiabao of china saying whatever happens here, we're going to continue on this path ourselves to mitigate emissions. we saw what he's delivering likely more privately and urgently. we'll see over the next few hours to ditch the talk and
finally get serious and come to an agreement on those principles of transparency, mitigation and financing, whether that will bear through as he comes back to the united states. medical devicemaker beckman colter is on the front lines of the debate of health care reform. joining us now, scott barrett. 75 years and once a year you talk to analysts about what's happening to your company. >> right. >> a lot of interesting things are going on. you do both stuff to help people do research, but also diagnostic testing. >> right. and point right at the patient's side you can do it, as well. >> absolutely. >> we want to spend our time as productively as we can. do you want to talk about health care reform or some of your new products? >> well, maybe a little bit of both. the diagnostics industry is one of the bargains in health care, part of the solution to the health care costs issues that we
face. 70% of the information that a doctor uses in a diagnosis is in the last. and the cost associated for that is less thanl 3%. now, that is the cost of the service. our costs are really a very, very small portion of the overall health care cost. now, it's -- it seems to me it's rather unfair that we're getting hit with a medical device tax that goes across the board of all the medical devices from heart values and pacemakers, to surgeon's glows to diagnostic tests. and, you know, i think there's a lot to recommend health care reform. but our industry feels like the taxes is maybe something that if more and more of our congressmen
and senators understood all the facts, they would say, well, this is a great industry and part of the solution to the health care costs. >> is it because you didn't have lobbyists there? >> well, our lobbyists did a good job. the initial ideas were far grater than today. evan bye from indiana, several others, so we're getting good support, but yes, we need to have a stronger voice. avnet had their board meeting last week.that's the medical device technology industry association. and we've made a decision and created a diagnostics association within avanet because we have a lot of differences between testing and most of the other medical devices. we need a stronger voice and on behalf of diagnostics, and so this industry association for
diagnostics announced yesterday, i'll be chairing that new organization, and we'll have the -- the ceos and heads of businesses from virtually all the major diagnostics companies and many of the early stage companies. >> the drug industry says, hey, you know, we prevent things. this is the biggest bargain you can get are pharmaceuticals. you say you're only 3%. who is it, then? >> well, i think we have to look at -- >> where is the problem? >> we have to look at what the problem is and -- but they made a deal. the ama already cut a deal. >> patience. patience asking for things. i've got a titanium hip. i have a much better lifestyle thanks to that hip. >> you do? >> i do. >> you have a titanium hip already? >> i do. i had an injuries when i was a
young man and i got it about 15 years ago. >> we get@of the things that we need. that's part of the problem. >> right. and i think we're all pretty happy about that. >> it's just the 30 million people that aren't getting what they need which is part of the problem. >> some of those 30 million people don't have a lot of needs and they've decided to take a risk. >> and not have it. all right. >> so we need to find ways to improve health care and bend the cost surf. i don't know that we need to have a special tax and medical device to pay for it. >> we appreciate your time. we're going to have shoulder deenl in later today. anyway, thank you. thank you. >> when we return, we're going to head over to the chairs for a look at what is grabbing our attention in the chairs this morning. plus, byron wein will be joining us for his predictions for 2010. a lot of his predictions for
2009 were dead on. coming up at 7:40 eastern time, jim demint. we've got a busy morning still ahead. stay tuned. thing as taking a chance? as having to decide to go for it? at the hartford, we help businesses of all kinds... feel confident doing what they do best. by protecting your business, your property, your people. you've counted on us for 200 years. let's embrace tomorrow. and with the hartford behind you, achieve what's ahead of you. ♪
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>> yeah. >> the festive side, the festive side of carbon dioxide. yes, cows burps, don't eat eat more meat. if you're popping champagne, guess how many bubbles are in a bottle of champagne? >> 1,000. >> 20 million. known for their large size. and you know -- you've seen -- beer, you see the way, those are small. that's why you get that head. you see what happens when these go to the top. little beautiful aromatic pieces of -- bits of the champagne. >> frothy. >> it's so wonderful. >> it hits your nose. it hits your nose. >> look at that! >> just know you're killing poor mother earth every time you open one of those. please, change your habits accordingly. i don't know if they're talking about this in koeppcopenhagen t but they should be. this should be banned.
all champagne should be banned and we shouldn't be talking. >> i didn't see that in the policy, the white papers. >> it's really cool. it's in page a-20 of "the journal" because the bubbles have a lot to do with the way it tastes. on the way up the bubbles grab some of the stuff in the champagne to make it taste a certain way. it is essential to the taste of champagne that -- we're going to keep doing this. it's coming up. new year's -- >> you drink the -- you drink the really good stuff, right? >> it depends on the occasion, carl. >> really? >> yes. yes. >> so maybe dom? >> no. don't you have a soft spot for casablanca and the germans -- they wore gray, they wore blue. >> yeah. >> gambling? >> yeah. i won't stick my neck out -- >> this is a great picture.
the times has a piece about falling gas prices. i know you check every time you go. >> i do. >> i just say fill up of 9, please. national average now $2.59, it's come down since oil has come down from $80 a barrel. it may fall a nickel before christmas and down to $2.50 by next year. it will help the retailers. >> it will. the retailers are holding their own. there's a big game of chicken with shoppers and retailers have not put the big discounts on. this convey later than they've ever waited. this saturday is the biggest shopping day of the year. until this point they've been holding their own. there's a story about that in the journal today. >> they haven't cut anything? >> they haven't gone to the deep discount. they may not because they didn't have the inventories like last year. >> what's coming up, becky? >> still to come, ben bernanke is one step closer to being
appointed. but senator jim demint joins us with his thoughts on the chairman. yesterday's senate banking committee vote, he voted against him. we'll see what happens. up next, we have our guest host, byron wien, he's joining us with his predictions for 2009. more "squawk box" right after this break.
his outlook for the market is coming your way. the senate banking committee gives the green light to ben bernanke's appointment. the chairman didn't get senator demint's vote. the senator from south carolina will tell us why he is not on team ben. serving up earnings. darden, operator of olive garden and red lobster beating results but says business remains sluggish. the company's ceo joins us on a first cnbc interview as the second hour of "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" right here on cnbc. i'm becky quick along with carl quintanilla and joe kernen. we have a big morning rundown for you today. we have darden ceo joining us servings. he'll join us on the latest results at his restaurants,
which include olive guarden and red lobster. when it comes to the credit markets, what do we expect to see in 2010? we'll get our predictions for what to look for in the new year. chairman ben bernanke is one step closer to being reconfirmed but senator demint will tell us why he didn't vote for him. first, let's get to carl who has a look at morning headlines. >> among the stoerngz we're following, research in motion beat practical, record sales of blackberries. they say 80% of new subscribers were consumers instead of corporate. other kel is up 4% amid slowdown in tech spending. president in copenhagen this morning spoke about 30 minutes ago and emphasized the need about reducing carbon emissions and raising funds for developing countries. john harwood has been there for
the past couple of days. more from him on the president's comment. as we wrap this up, what kind of takeaways are being developed this morning? >> well, this is a very fast-moving story, carl. if you listen to the president's remarks, you could see him laying a predicate for explaining to the american people why these talks have fallen apart. he says, we are ready as the united states ready to embark on a program for financing for mitigation of our own carbon emissions and transparencies but others are resisting those talks. the chinese indicated they might go their separate ways. i just heard from a senior white house official that president obama is now in a bilateral meeting with premier wefrom chi. >> what might that look like? when the president says he wants something operational, what does that mean? what is the best case scenario
coming out of this important bilat? >> reporter: well, we've all been wondering exactly what the term operational means in this context. the a given we are not going to have a legal and binding agreement come out of here that will be submitted for ratification to the legislatures of the various countries. the hope is that there will be an agreement that would be comprehensive in the sense that all major players, developing countries and developed countries alike, would commit to reducing carbon emissions by some specified point and would agree to back up those commitments with monitoring and transparencies and that you would also -- they wouldn't be the same. the catchphrase is common but differentiated responses. you'd also have financing so that the eu, the united states, other advanced countries that have been at a much higher level of development and emissions for a longer period of time would provide financing for those developed countries. if you had all three elements, reduction in a near term, by 2020, so it's not a distant 40
or 50-year goal, then you could consider that a meaningful agreement. and the question's going to be -- there will be a document that comes out of here. the question is, whether all those elements will be in it and that will be the difference between meaningful and just a hoardatory piece of paper. >> do you think the trump card the secretary of state played yesterday, getting $100 billion together by 2020 for developing countries -- >> reporter: 2020. >> i was going to ask you, how effective that was in moving the needle? secondly, how much of a sticking point is chinese verification going to be? i mean, is that at the end of the day, is that going to be the real problem, getting them to open their doors to the rest of the world? >> reporter: yes. that is, in fact, the principle problem in the view, at least, of the u.s. negotiators. they seem to move the needle yesterday. there was a different tone to the discussions yesterday. but the question's going to be,
as one american told me, we don't know if china really want a deal coming out of that and that's what president obama is finding nout that meeting. >> we've seen oil trade a little bit on this conference. people, obviously, trying to tried and find out if there's something concrete, using that word loosely, out of the conference today. we'll see what happens. we know you'll keep us posted. there's a look at what crude has done. close to $72 and change. john harwood in cone hagan. let's talk markets and get to our esteemed guests. it's quadruple witching. we're putting witches for that on. four our guest host byron wien we do a lot of jurassic park, not because he is a dinosaur, just the byron. morgan stanley, they called you byronasauru schls rex. >> no, you invented it.
>> i we just extended. he has these surprises for 2010. you were pretty good in 2009. but ed is not here for two hours, so looking over what you're saying, ed, you've been no positive. you continue to be so. that's the big question we have. does a deep once in a generation, once in a -- in several generations, does that type of recession cause a tepid rebound or is it like a stretch spring? this is going on -- you think 6% in the fourth quarter for gdp? >> i had been thinking 4.5% but after the october report came out for inventories, i'm now thinking inventories may be flat or up a little built in the fourth quarter. if they're just flat, that alone would increase real gdp by 4.5% so i'm thinking 6%, 6.5%. >> better than expected earnings, and revenue growth
comes back because of -- >> well, the economy doesn't sit there ask do nothing waiting for the government to get us going. people are aspirational. there's a lot of panic although the beginning of the year. people are feeling more certain about where things are going. they just want to get on with business. i think we're going to start to see hiring. >> barbera, you say you speckically agree with bob, who was pillary a couple months ago -- >> bob has been right on the money. you know, he's been pointing out that if you just do a simple extrapolation of the cyclical trend, you're starting to see employment could start to increase very shortly. and i think, you know, i've said and others have said the november numbers may be revised to show an increase. >> so the skeptics who say, yeah, companies have a lot of cash, but they're going to hoard it because of all the tax incertainty -- >> they're not in business to hoard cash. >> maybe they buy a company. >> right, exactly. >> maybe they buy a stock or hike a dividend but they don't
hire. >> the data suggests they've stopped firing, which is the first thing you want to see happening. i don't think it will be long before you see hiring. i'm not expecting a big recovery in hiring, but i was thinking we wouldn't see an increase until the middle of next year. now i'm thinking, you know, it might have started in november. >> we try to engender intellectual combat. i don't know if i'll get you to disagree. you've been much more bullish than a lot of people for the last eight months or so and it's been borne out by what we're seeing. >> one point that supports ed's position is productivity is so high. you can't run these companies with 9% productivity. i mean, that shows that you haven't hired anybody and you're just working the people who are on the line to death. >> well, you know, you're talking us. we know what you're talking about. >> yeah. >> you know, that 3:00 a.m. wake-up call. look at my fingers. do you see the bones? >> that's dirt under your fingernails? >> no. those are bones that you see
because they've been worked. >> yeah, the three of you are still only on for two hours. >> three! >> three hours. >> three, long hours. >> i'm only on for two hours. okay. you're on for three hours. >> did you not know that? >> no. i watched a little bit of it before i left. >> well, thank you so much. i can't believe that. you just -- >> he has so much fun, it feels like only two hours. >> to, but think about it. the average american worker is on for 3 1/2 hours. you know, and he's doing the same job. and he's getting paid for that -- you know, something. >> a lot of preparation went into this, byron. >> but the key thing is we just need to hire more workers. people are reluctant, as carl said, because of the uncertainties, the tax bill, so forth, so on. eventually they'll hire more people. >> how come we haven't seen the numbers popping up, where you're talking about the average hours that are worked. it's still 30.1, right?
>> you've gone from 33 to 40 on that and you've seen initial unemployment claims come down. >> and temp workers. >> temp workers is a very good point. >> temp workers -- >> so it's not necessarily a seasonal thing, something companies are trying out before they're forced to hire full-time workers? >> what i think is interesting is to watch the revisions in the data. i tell people don't tell people not to pay too much attention on the first numbers. it's the revisions that are more important. for the past seven or eight months they've been revised upwards which is usually a sign things are improving. >> i think the key thing is, people are feeling a little more secure about their jobs. you know, and they -- >> the firings are down. >> right. that's what you need to have. >> animal spirit. >> but you can't -- >> we can't wrap yet. you're going to be here. listen to this -- >> joe, i've been shut up by bigger people than you. >> just about anyone. just about anyone is bigger. 13 to 1350 by march.
>> 1300 to 1350 by march. >> and dollar stays strong, stays in a really. >> i think we're seeing an inflexion point here where people realize that what drives the stock market is earnings. a firmer dollar isn't going to change the earning cycle. >> i mean, that's a huge statement to make, that the dollar rallies and that the s&p goes to 1300 to 1350. the whole carry trade is not -- it's going to have to be something else that -- >> i know, but if you look at how much commodities prices have gone up and stock prices have gone up this year, they've gone up a lot more than the dollar has gone down. there's something else driving these other markets. and it's the global economy. it's recovering. >> so the ten-year in march? >> i think we could be looking at 3.5%. i think the fed's going to keep it at zero for an extended period. i don't think they start tightening until this summer. >> where were you at year-end? >> 1200. >> is that too much by march, do
you think? >> what, 1350? >> yeah. >> i don't know. >> it's possible? >> yeah, sure. i would never disagree with that. >> yeah. >> i get all my ideas from byron. >> just the positive feedback loop. >> yeah. this is -- okay, good. >> there's only one economist. just people interpreting it lately. >> you just line them up end to end. i have another jock. economist is a guy who knows 100 different women, dating 100 different women -- >> let's see you get yourself out of this one. i'm not going to do it. thank you. >> last time you were on the program -- >> i know, i know. everything's different with tiger. you can say anything nowadays. what would tiger do next in the weeds? if he's a very high weeds, i have an idea. thank you, ed. byron will be with us for the rest of the show. >> thank you. if you have any comments or
questions about anything you see here -- >> please don't write in. >> -- please write us. firstname.lastname@example.org. up next, we'll be talking surf and turf with the ceo of darden restaurants. they're the owners of restaurants, places like long horn steakhouse, red lobster, olive garden. also we'll be getting an outlook for the credit markets of 2010. we'll find out from the head of morgan stanley, greg peters. time now for today's aflac trivia question. what art movement was yokeo ono associated with during the 1960s? dental bills... gazooks. you need a back-up plan ho, ho, ho. that's why we have aflac! so i'll have cash to help pay bills! great...but what if you're still not better by christmas? hmm...
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now the answer to today's aflac trivia question. what art movement was yoko ono associated with during the 160s? the answer fluxus. ♪ welcome back, everybody. the futures right for you. take a look at things and where they stand on this friday, which is a quadruple witching day. let's take a look. you'll see futures are up by about 51 points above fair value right now. we'll see what happens during the course of the morning but things could be volatile because the a quadruple witching friday.
meantime, take a look at shares of zales. "the wall street journal" says zale is canceling orders from some suppliers because of slumping sales. it is struggling under a considerable debt load. keep an eye on that as well. meantime, darden restaurant earning 43 cent a share for the quarter, a penny above estimates. revenue was just about in line. joining us from florida, clarence otis, ceo of darden restaurant. good to have you back on the program. you say the environment remains overall tough. which is the stronger dynamic right now as we go into 2010? >> i would say the improvement die nam sick a stronger dynamic. when you look at the sales numbers for our fiscal second quarter, both the industry and for us, there are negative signs in front of those numbers. for sure, continues to be what we characterize as sluggish. but on the other hand, when you
look at our fiscal second quarter against the first quarter, again for the industry and for us, the see agaquential improvement was significant. industry down 8% and our fiscal first quarter on same restaurant sales down 6%, in the second quarter we were down 5.5% if the first quarter. that's a significant sequential improvement. december is early days, but it started well. we would hope and expect that it's the beginning of another quarter of sequential improvement. >> interesting. some analyst would call this quarter the worry quarter, just to see if we could get through this sort of tough year-end period. where's the upside coming from? is it in traffic? is it in average check size? is it coming from one particular chain or another? >> yeah. i would say from an industry perspective, both check and traffic have gotten better. we see the same thing. in our business, olive guarden
and long horn steakhouse in the second quarter clearly outperformed red lobster. a lot of that has to do with the tactical decisions we made. and so we ran price pointed promotions in the second quarter at longhorn and olive garden. we chose not to do that at red lobster. as we go forward through the balance of our fiscal year, that's going to change. and we'll have price pointed promotions at red lobster, pull back at the others. we'll really do what we think is appropriate for the brand and for the particular time period. >> so are you feeling good enough to where you can start hiring be, maybe not aggressi aggressive aggressively, modestly, advertise, those kind of things? >> we have continued to advertise at very strong levels. we have national brands. we think our media weights are appropriate for national brands. we haven't had inkre mental advertising but we haven't pulled back at all.
on the hiring front, the sale thing. we continue to open restaurant. this fiscal year we'll open 50, 55 new restaurants. that's 5,000 to 6,000 jobs. so we've been growing and investing in the business through this period. to the extent things begin to ramp up, as we expect, i think we pit exca might accelerate ne restaurant openings a little bit and hire more. >> you have a very good idea of just how consumers feel and how they felt, let's say, over the last year. can you kind of trace that arc for us, how consumers are feeling now, not only where they were a year ago but where they were two months ago, three months ago, too in. >> yeah. i would say sentiment has gotten a lot better. i heard the conversation before the break. i would track it to job losses. and as job losses have abated and it looks like we may be at the end of that cycle, i see continuing improvement. so if you look back, beginning of the year, 600,000, 500,000
jobs lost a month, even through the summer, 300,000, 400,000, a lot of concerns about job security. now that we're getting toward the end of that cycle, i think you're seeing that sentiment pick up. >> what does that mean from a consumer's perspective? does that mean they're having an extra drink at the table, coffee or dessert after dinner, coming in more often? what does that mean from a realistic perspective on an individual consumer basis? >> i think it's visit frequency. they're coming in more often. i don't know that they're spending a whole lot more. i think they're trying to be prudent there, but people ratcheted back their visits as they worried about jobs, as they worried about their household finances, as they get more comfortable i think they visit a little more frequently. still pretty frugal when they're out but visit more frequently. >> clarence, it's joe. you know, producers tell me we have a streak going on this
question, so i know you always come ready with an answer for it. but, you know, like the ingredients that go into mexican food, those are cheap. i see a billboard all the time that bill gates started microsoft during a recession, so that's not an excuse you can't start a few chain. i just -- you never really have a decent answer for me on where the mexican chain is for darden. and i was -- you sell margaritas, $6, $7. what is the holdup? >> joe, we sell margaritas at our italian restaurant and we put a little italian liquor in it and call it an italian margarita. >> smokey bones? what was that? you go barbecue. darden, darden, i don't get it. carl, the hispanic population, the influence in the united states, j. lo, right? >> why did you ask carl?
>> carl quintanilla. >> i don't know what you mean. >> clarence, it's a huge demo, let's go. >> we'll get on that. >> that's good. that shut him up right there. clarence -- >> i think some day he will. >> clarence, are you seeing customers coming from higher-end restaurants into your stores? that's one of the things i'm curious about. in other words, are you getting a new population that's helping your restaurants do better? >> yeah, that's a tough one to tease out of the numbers. we think there is some trade down. and that's making up for the trade out a little bit at the bottom end. i think we do have capital grill, and capital grill has a higher end consumer -- >> smokey bone. >> they also have the business -- the business consumers on the luxury consumer we are seeing that consumer come back even stronger. so capital grill's results on a sequential basis have improved even more. >> that's good news.
clarence, good insight. always good to see you. >> if you're ever around f you're in new york, we would love to have you come into the studios. we get to talk to you all the time on remote, but come in. >> i will make a point of doing that and getting on the mexican -- >> if you come in, it will get done. it will. >> he's going to go back and tell his development guys, don't tell them -- >> he can't do it now because it's my idea. he's the ceo, but obviously -- thank you, clarence. >> thank you. >> good to see you. still to come -- how can he do it now? he would have got it from me. he can't. he's just resisting for just that reason. 2009 was the best year on record for morgan stanley's global credit fund and outlook from the company's head of fixed income is just ahead. take a look at energy prices this morning. "squawk box" is coming right back. natural gas is a cleaner burning fuel,
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if you have any comment or questions about anything you've seen this morning on "squawk," e-mail us. we're going through this now. email@example.com. still to come, we have senator jim demint on the future of the fed and the confirmation of ben bernanke. "squawk box" will be right back. [ male announcer ] if a car wants to impress you...
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the dollar steady after hitting the three-month high yesterday. the president says the time for action on climate change is now. speaking at the climate change summit in copenhagen a while ago he pledged the uts wou.s. would continue on the path to reduce emissions. he says without enforcement measures, any agreement is just, quote, words on paper. r.i.m. shares set for a big pop. they reported earnings above estimates late yet. results were helped by strong sales in overseas markets. get ready for what retailers are calling super saturday. shoppers expected to flood stores tomorrow and this weekend. the last one before christmas. this weekend's results will be widely watched for shopper volume and the level of discounting, which as becky mentioned in the last hour, hasn't been all that dramatic because inventories have been lean, traffic's been decent. >> question is, can that continue or will there be some break this saturday? there will be plenty of shoppers trying to find out. 2009 was the best year on
record for morgan stanley's credit record funds. the outlook on market? still bullish. joining us first on cnbc is greg peters, global head of fixed income research at morgan stanley. greg, this was the best year on record for your investors? >> absolutely, by a factor of 4.5 times. it's just fantastic, fantastic year. and what we're saying is we're -- we can't repeat last year or this year's performance in 2010, but it's still going to be very, very good. >> why is that? >> i think this holy trinity is still if play. fundamentals are quite strong. i think technicals are quite strong. and i think valuations are still attracti attractive. those three issues are still quite favorable for credit. so we feel pretty good. >> you're also telling investors they should be buying the junk. what do you mean by that, the
high-yield stuff? >> yes. high-yield in my view is still very attractive. we want to own the junkiest of junk, we see this organic deleveraging and high-yields from 8.5% to 7.5%. risk-adjusted, for sure, particularly given the economic backdrop of next year and the alternatives. >> you still say there are risks out there, some things that could happen. what's the biggest looming risk, in your opinion? >> i think the biggest risk is really the looming maturities so $4.2 trillion of commercial real estate levered loans and high-yield bonds coming due through 2014. that's extremely large number. and so ultimately the bet we're making is that the financing markets will remain open. >> you say that when you're talking about buying the junkiest of the junk. is there a way to make sure you're not going to get caught in that trap?
>> not necessarily. it's very ideosynkratic. you have to be selective in the names you bet. we're betting these companies have a lot of significant runway, i.e., cash on the balance sheet. the bad quarters roll off, there's significant deleveraging and access to the capital markets is critical. i think it's a very good bet to make. >> hi, greg, it's byron wien. you remember me, right? >> hi, byron. of course. >> it strikes me the 3.5% yield on the high-yields is way low for the amount of borrowing we're doing. don't you think that has to go up? >> yes. our call for the end of 2010 is 5.5% ten-year. rates seem low given the economic strength, the amount offishanof i issuance that has to come. i would agree with you, byron. >> what about the 30-year, do
you have an estimate for the end of 2010, where that will be yielding? >> we're more focused on -- the ten-year is on a better point of the curve as the 30-year, since there is a lack of duration in the world, that continues to be pretty well bid. but i would focus on the ten-year as a true indicator of where rates are going. >> is there a decoupling between treasuries and corporates? i mean f the ten-year goes up to 5.5%, what's going to happen to corporate yields? >> corporate yields will also move up, but then what i think will happen is credit spreads will continue to tighten in. so the risk that anyone in fixed income faces over the next year, ten years, what have you, is this secular change in rates, i.e., rates moving higher. i think credit actually does really well in that environment, particularly high-yield, which doesn't have a lot of interest rate risk attached to it. >> what about all the troubles we've seen facing municipalities, whether that be california, new york state, some
of new york city, some issues coming up. how many problems do you foresee popping up next year because of just a strain on public finances? >> that's another risk. you know, it's funny, every conversation i have ultimately flows into what are the ricks and that is a big rick. so what we worry about is that sector tainting the entire corporate market as well. so that's something that we're very focused on. what i do think will have to come to a head in 2010, but once again, the bet we're making is that investors will be able to isolate the ricks in corporate america versus the muni side. >> thank you for your time. we appreciate you coming on. >> thanks for having me. when we come back on "squawk," senator jim demint, not one of those supporting bernanke's bid for fed chairman. he'll tell us why when "squawk box" continues.
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futures up about 50 points above fair value. also 2009 final quadruple witching day of the year. investor carl icon has a new hobby. he has taken an 11.3% stake in the game publisher take two interacti interactive. its he's seeking talks with management but they didn't elaborate on that. maybe there's an opportunity somewhere in the video market. >> i almost got sold on the zombie one. i forget the name of it, but it's big. wouldn't that be fun? you don't want to kill -- they're already dead. >> you're not actually killing another -- >> exactly. senate banking committee voted 16-7 in favor of ben bernanke's nomination to a second term as fed chairman. one of the no votes came from senator demint, member of the banking commerce and joint economic committees. good morning, senator. why did you vote no? >> good morning.
they're trying to cram a lot through here before christmas so it's more than just health care. but chairman bernanke has presided over probably one of the biggest structural breakdowns of our financial systems in generations. and it's probably the most important nomination we'll ever consider here in the senate. what we haven't heard is what ware going to change and how this is not going to happen again. certainly, everything cannot be blamed on chairman bernanke, but loose monetary policy, obviously, did a lot to create the housing bubble and other economic problems. and he has yet to say that he's going to change anything about what he's doing. >> so he was there when greenspan was keeping rates low, that's your -- that's your reasoning? >> well, chronically low interest rates encourage overleveraging -- >> he wasn't the fed chairman. what i'm saying is you're saying because he was there and didn't talk greenspan out of it, that you're painting him in with the same brush? >> he's been here four years. and he has told us two months
before fannie mae collapsed that it was well capitalized. he said the subprime lending was not going to affect the overall economy. i mean, the whole world listens to what the chairman of our federal reserve says. now the whole world is questioning the value of our currency and our ability to pay back our long-term debt. all we're asking is a better look at what's going on. we're insisting on an audit of the federal reserve so that we know what they're doing. it's congress's responsibility to manage monetary policy. we have delegated it to the federal reserve. we at least need to provide oversight. >> senator, i spent some time talking to larry kudlow last night, who is worried about how this vote came down. the idea that there were seven votes against him in this committee before it even goes to the floor. i mean, the worst vote you've ever seen against a reconfirmation of a federal reserve chairman is 16 no votes against volcker the second time he was up for election.
if you've got seven no votes in committee, what does that mean on the floor? and how problematic is it to have a federal reserve chairman who doesn't have strong bipartisan support? >> well, more than anything, we need to just put some scrutiny on this. we need to find out more about what happened, what they're doing. we don't need to politically manage our monetary system. it needs to be independent. but that doesn't mean that it needs to be secret. i think you've got less than 20% of americans who have confidence in the federal reserve. that is eventually going to affect lawmakers who stand for election next year. so a lot of us are asking questions. it makes no sense to rush his nomination through without finding out more. we've requested documents from the federal reserve that we have not received. secrecy does not mean independence. i mean, we need to know more about what the federal reserve is doing. >> how is this health care going to play out, senator? let's shift gears.
it's gotten interesting. we have governor dean on later today. it's somewhere in the middle. the left doesn't like it. the right won't vote for it. is it going to happen on christmas eve and they'll work on some with ben nelson and get 60? >> i can't believe we're still here and trying to pass things in the dead of night. they're trying to rush through the nation's priorities. last night at 1:00 in the morning we voted on a defense authorization bill they packed with over 1,000 earmarks. it's the craziest thing i've seen in my 11 years in congress. it's no longer a health care bill. it's a grab bag of political payoffs. they're trying to threaten and bribe the democrats to vote for this. and in the process, i think they're alienating some of the liberals who really wanted a government take joeover and the know that's where this is headed. gosh, i can't believe ben nelson has been able to hold up under this pressure. if he holds up, he deserves a congressional medal of honor. >> why is it not an example of democrats compromising, giving
up all these things we know were important to them? why -- how can you argue they have not at least tried to find something that's closer to the middle? >> well, they're not going for the middle. i mean, it's either left or far left here. not one republican idea has been considered -- >> but you know where i'm going with the public option, the medicare buy and all that stuff. >> right. but if you take over the insurance companies by mandating what they can sell and mandating what people can buy, you've essentially nationalizes the insurance industry anyway. so it's just a different costume on the same idea of a government takeover. fortunately, the more we string this out, the more americans find out what's in it. it's unbelievable we're getting ready to vote on something that no one has seen. except maybe harry reid. they're pull this rabbit out of a hat and want us to vote on it within a day or two. that makes absolutely no sense. we're not trying to stop health care reform, but we are trying to stop this fraud of a process and stop the government takeover of health care.
>> well, it's amazing -- okay. it looks like that will happen, right? you got that momentum. but then when you try to reconcile with the house, which has a public option, and a lot of guys in the house that that say they won't go for it without a public option, when does the momentum actually just stop? how do you see this happening? or does it not stop, we finally go to something the president signs by the state of the union or even by the end of the year? >> well, i'm surprised momentum is still going with over 60% of americans being against this. but the president still has most of the democrats mesmerized. a lot of them here in the senate said they weren't going to vote for it, but now they've all come around after visit to the white house, that they're going to vote for it. but they haven't even seen it. it has nothing to do with the policy or the substance. it has everything to do with politics and the president being very persuasive with his democrat colleagues. >> senator, i'm worried that all this hassle about the health
care bill has disenchanted the american people. they kind of think that congress can't get anything through that really makes sense. and so they're losing confidence in the whole legislative process. do you sense that as well? >> i sense that and they should loose confidence. we shoulden be trying to change health care with a 2,000-page revamp. this is the kind of thing, and business knows this, those who have tried to improve quality know it's a step at a time, a continuing process. and we need to do things like tort reform, interstate competition, fair tax treatment, small business health plans, work these things through one at a time instead of trying to make our system like europe's. let's improve what we've got, which is the best health care system in the world. >> i don't know. you get congressmen complaining about a three-page bill when we're putting together the t.a.r.p. you get congressmen complaining about a 2,000 page bill when you're trying to tackle
something as large as a seventh of the economy. how many pages a bill should be? is there a perfect number, senator? >> well f you look at the bill, and i've been trying to go through the decoy they've got us chasing right now, it's not just about health care. it's incredible mandates, reductions in medicare, things people need to know about that. we need to focus on more single subjects and debate them openly, not at night or at holidays. there's no reason we should be cramming this through at christmastime when it doesn't take effect for three or four years. >> hadn't thought of that. senator, we appreciate your time this morning. >> thank you very much. >> you're welcome. we'll see you again soon. >> okay. >> incredible. when you come back, more top stories and meet the "squawk," david gregory on the president's speak in copenhagen this morning, how the world is reacting to that and how the health care debate will come down, if it happens this month.
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♪ ♪ never find another lover >> in the morning, where we're all at our desks upstairs, joe has at least one song in his head and that inevitably makes its way to the animal orchestra. you know before you even get to work what you're going to do. >> this guy is married to who? >> gavin rossdale is married to gwen stefani. that band is -- >> i like bush. i like glisceryn, everything in, down from this cloyd --
>> and you like -- >> and i like animal orchestra. >> and you like this band. >> i like this band. gavin rossdale's band. i said it once. i'm not going to have that sound bite twice. research in motion is on the list of stocks to watch. $1.10 versus $1.04 estimate and revenue is above -- you know i'm in the market for a new blackberry, too, because my -- i cannot get the little ball to move left. >> oh, you know what, though, you can take it apart and we can fix that for you. you take it apart and wash it off with alcohol. >> i haven't been able to play brickbreaker for a week. >> i'm getting a new one. >> he's what he want in america, you know. >> i need -- >> spoiled babies? >> no, no. get rid of the old ones, buy a new one. >> thank you, byron. thank you. i don't want to fix it. >> we can fix it for you. >> planned obsolescence. for years we made cars that you needed every four years.
>> yeah. he's living schoompater. >> what? >> creative destruction. >> thank you. second quarter, palm, loss of nickel. tale of two cities. r.i.m. versus palm. but that move in palm from 2 to 18 was just incredible to watch. you know, i guess palm's not going away, obviously. you can't imagine trying to compete with iphone and blackberry, but they do. we've got your at&t thing settled yesterday? >> no. >> verizon -- >> no. at&t, tons of dropped calls. do you get them on your -- >> no. but your comments did get some people's attention the other way. >> verizon's. they started e-mail me yesterday. come to verizon. i left verizon because at&t had a better global network at that point. they tell me they ficked their global problems. >> oracle reported nongap of 39 cents, three cents ahead of
expectations. that's a multi-year high. we wondered if they would have enough juice to get above a two or three-year high. the next stop, i guess, if you're looking at all-time highs up in the 40s somewhere for oracle. finally, boeing budget carrier ryan air has stopped discussions to purchase as many as 200 new boeings 737s after being unable to get concessions it wanted from the manufacturer. >> so between oracle, nike and r.i.m., pretty decent earnings in tech last night. one reason futures are -- >> definitely oracle people watch, especially as they -- you know, athey acquired so many different companies. >> what do revenues look like, though? >> it was above expectations. i don't know if it's above year to year. when we come back this morning, huge movie news this week. avitar is expected to be a big block u.s.er, people are calling it mind-boggling.
but will 2010 be a blockbuster for people? weet get some predikes. find out why clean fossil fuel is coming under fire. fide, traders learn from the pros. say you want to backtest an entire portfolio of stocks. market experts show you how through fidelity's extensive trading knowledge center. and fidelity gives you free research from 15 independent firms, with accuracy scores... to help you decide which analysts to trust. find out why more and more active traders are turning to fidelity for a smarter way to trade online. trade like a pro. trade with fidelity. somewhere in america, there's a home by the sea powered by the wind on the plains. there's a hospital where technology has a healing touch. there's a factory giving old industries new life. and there's a train that got a whole city moving again. somewhere in america,
bulls, bears and "avatar." the potential blockbuster opens today with high hopes, but should investors expect blockbuster returns in 2010? we'll get some predictions and forecasts for the new year. health care reform. under attack. >> they've sent us a message. >> why howard dean is joining the growing list of critics. >> we will send them a message. natural gas under fire. why the clean energy debate has turned to drilling for the natural resource. "squawk box" begins right now. welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with
becky quick and carl quintanilla. our guest host, byron wien, top strategist at black stone but best known -- how many years at morgan? >> 21 years. >> and you were chief something, big chief sandwich? strategist? >> yes. >> well known for your surprises. surprises are harder and harder to get because you need to know what the consensus is. to pick a surprise you have to be an outliar. it gets tougher and tougher every year. >> not every year. last year was not tough. because everybody was negative last year. and, so if you were positive, you could come up with a whole set of positives. >> this year it's mixed. >> very mixed. >> i can give you a whole bunch of negative people. >> and a bunch of positive people. >> that's true. >> people are all over the place. coming up with consensus is hard -- >> you can do dollar, gold, oil, all these -- health care, politics, you can do november, who's going to -- who takes the house, the senate. have you been thinking about it?
>> i've been thinking about it. >> he's not going to reveal it today. >> you're not revealing anything today? >> january 4th. >> i might tell you i'm not going to use. >> that will work. >> as long as you -- process of elimination. he'll be back in january. >> it's not a morgan stanley thing. you can tell us -- >> now it's blackstone. i have a w-2, you know. >> all right, all right, all right. i don't know how many yachts you can water ski behind, byron, but let's get to carl with more -- he's still making money after -- you know, he's got more money than -- >> a lot of us. joe, the president says the time for action on climate change is now. he told the climate change summit in copenhagen the u.s. will move ahead with measures to reduce emissions even if the summit does not produce an agreement. >> as the world's largest economy, and as the world's second largest emitter, america bears our responsibility to
address climate change. and we intend to meet that responsibility. >> president also says financial help for developing countries is a key part of a world climate change strategy. check out oil this morning. rising over $74 a share on some new reports out of the middle east. an iraqi official says iranian troops briefly entered an oil field in iraq. iran is denying that report. but you couple that with colder u.s. weather forecasts, some snow coming to d.c. and maybe new york, helping drive oil prices higher this morning. brian moin hynihan gewill b joining us on "power lunch" 12:30 eastern time. the s&p 500 is up 62% since its closing back in march on those low levels. will that momentum continue? joining us right now with their market forecast, david malpus, the president of insema global, and byron wien, blackstone's
senior managing director. we've talked about where we've come, how much the recovery has come back. while you acknowledge that you're worried about a lot of things looming. what's your biggest fear? >> good morning, becky, carl, joe, that's the right order. yeah, i think -- is that right? i think that we are in a recovery, and so i'm comfortable with that. the question is whether some of the bad things go on that can go on. one of them -- and you see them emerging all the time. one is the big tax increase that's coming in 2010. so one of the key questions here, as washington does this huge expansion, is where the jobs are going to come from. of course, washington is going to create lots of jobs. the biggest question for the market is whether the private sector can create any jobs. there's been this big downsizing. that depends on credit going to small businesses and they're not getting it right now. nothing that washington is doing is helping that big problem.
>> and you're worried about how that plays out in the market, david? what do you think? this is something that's looming over the markets that will catch up with it in 2010? >> no. i think the fed is putting enough liquidity in. we see these ultrasuper dovish statements about the liquidity so that means the government gets all the capital it can have and the corporate sector is getting tremendous amount of money. and the rest is going to asia. so you're seeing growth in those sectors. the problem with that is it doesn't create that many jobs for americans. meaning, if you put -- sink all the world's capital into the u.s. government, big corporations and asia, how does that create jobs for americans? >> byron, what do you think in terms of how jobs are created here? companies just get to the point where they have to hire? >> yeah. i mean, first of all, i think we cut jobs back way too far. so i think the normalization of employment is going to put a lot of people back to work. but one of the things that worries me, david, is that we're only at a 70% operating rate.
so why should people borrow to buy capital equipment if they're only 70% operating rates? it seems to me that, you know, why would -- if i were a businessman, why would i want to go to the banks? i've got plenty of liquidity on my balance sheet as it exists and i don't need any new plant equipme equipment. >> hi, byron. good to see you and hear you. so, the small businesses often are starting from scratch. so they aren't con trained by the excess capacity of the old industries. there's lots of dynamism. there's excess capital for big companies, they have a lot of money and they won't invest. the question and the trick for 2010 and how do you let that extra capital, the fed's putting out five times as much capital is as-s actually needed but it's getting indebted into governments and big business. is there any trickle down process to let small businesses get the capital so that they can create jobs? there's no idle capacity when
you start your own new business and that's the problem that we're running into. >> david, nobody has written more per be accepticeptively ab dollar than you have. why don't you comment on the dollar's strength and what significance that has. a lower dollar, i would think, would continue to help u.s. exports. >> i think there is some benefit to exporters, but it comes at the cost of the rest of the country. it's kind of like import tariffs. if you put a tariff on somebody it helps the industry being protected but hurts everybody else in the country. so as you weaken the dollar, it helps some exporters, mainly big corporations, but it causes the idle capital in the country to move toward asia and toward emerging markets in general. so on net you lose jobs. we saw that in the 2000s when the bush administration had a weak dollar policy, it's continued into the obama
administration, and job growth was weaker than normal. in con trant, in the clinton administration the dollar was strengthened and job growth was robust in the u.s. i'm not in favor of a super strong dollar. i'm in favor of steady currencies because that creates jobs. wherever you look around the world, when a country put in a stable currency, the job growth is huge because businesses can plan and make those ininvestments. >> what's going to be the driving force for the dollar in 2010? are we talking about a relative picture where you look around the globe and get worried about all these problems hitting european nations and beyond and that strengthens the dollar or do you worry still about what you've just been talking about coming out of washington and that puts pressure on the dollar? >> well, washington's definitely been a negative on the dollar. i think we're right now in a temporary phase where people are worried about europe, and that's given some comeback. remember, the dollar had really sunk in november. so it's gaining a little of that back.
right now, i think because washington has an explicit weak dollar policy that's exuded by all of their statements, all of their comments, then the trend is still downward. that's going to weigh on the u.s. economy in 2010. in contrast, if you saw either the bernanke nomination falter, because that would mean someone would come in with a stronger -- with stronger dollar policy or less dovishness, then you should see the dollar turn. or if -- certainly if the president on any given day said he'd prefer for the dollar to be stronger, it would turn. washington controls the value of the dollar. they've been pushing it down and down in the hopes that there's some votes among exporters. that's just not a good long-term policy. and you saw it, president bush was not as popular as president clinton. now that's translating over to president obama, not being popular. i think largely because he's weakening the dollar and that costs american jobs and capital. >> all right. david, thank you very much for joining us. we appreciate seeing you today.
joe had a question about the order? >> he's right. becky b, carl, joe. the controversy over health care reform shows no signs of letting up. it's really kicked into high gear and internesing, now governor howard dean opposing the legislation as currently written. that earned him a mention from david axelrod yesterday on "moca joe". >> you got on the phone with nancy, our point person on the health care issue, went through point by point. she explained why he was wrong. he simply didn't want to hear
that critique. i saw his piece in "the post" this morning and it's predicated on a bunch of erroneous conclusions. >> joining us now, our cnbc contributor and a guy that we're on a poster together in the lobbies here, governor dean, from that u.s. ne"u.s. news & w repor report". you've been called wrong and insane many times but usually not by members of your own party. >> well, actually, it was, because the last time this happened was over the iraq war when i said we shouldn't be there and the party went crazy. >> so you're used to this. >> look, here's the -- i don't mind being called wrong. that's a reasonable difference -- >> how about irrational? >> well, i think jay rockefeller is a great guy and he gets upset about stuff and says all these kind of things. i don't want to make this personal. i like president obama -- >> oh, please do. not vigorously. >> that was a misquote which they corrected. i am going to support is it
vigorously. i think he's doing a great job in copenhagen. this is not about personalities. the problem is, this is an interesting thing, you know, i don't like the bill, the republicans don't like the bill. i want health care reform but this health care reform is wonderful for the insurance industry. here's the deal. they make a lot of promises in the senate bill but then there's the fine print that undermines. i'll give you an example. preexisting conditions can no longer be used to deny you health care, age can no longer be used to deny you health care, but you get to charge three times as much for an older person. there's cost control in this bill. but in order to implement it you have to come back to congress and get their permission. the thing tom daschle wants in the bill, which is a great idea, the imac. this is confusing jargon but it can't be -- no reports can be issued from this cost control for medicare unless the rate of medicare expenditures exceeds the rate of health care inflation. that has never happened in 45 years of the existence in
medicare. so, you know, the bill is being picked apart by special interests piece by piece by piece. meanwhile, they're taking out the big stuff. for example, the antitrust exemption for insurance companies. still in the bill. so there's no competition with insurance companies. i get forced, if i don't have insurance, to buy insurance from a company that spends up to 27% of its money on ceo salaries, planes sometimes, and return on equity. that's not money going to the health care bill. so, look, this bill is a bad bill. it's going to cause us a lot of trouble if it passes. it commits us to going down the road of only using the private sector. >> but you're still going to support it? >> no, i'm not supporting it. i would not vote for this bill. i'm hoping they will strip out the nonsense, pass a stripped down bill in two years, they still could. >> do you mind if i receipt something from president clinton. he says in response to your criticism, does this bill read exactly how i would write it?
no. does it contain everything everyone wants? but american can't afford to let the perfect be the enemy of the good. take it from someone who knows, these chances don't come around every day. are you saying they can do this next session? >> as the president said we can go back to the bill year after year and fix things. if we can go back to it, we can keep after it. this is more about insurance industry more than health care and that needs to be fixed. >> you just wonder, governor, whether -- we hear about, you know, you need the mow ten item. we need to do it before the end of the year. there are some people that say the ire is greater than it was in 1993. are you -- you know, you almost sound like a ralph nader here. you're trying to do the right thing but you end up scuttling a deal for the party with the best of intentions. >> you know, i compromise and i
compromise and i compromised. i think a lot of democrats compromised and compromised and compromised and finally they were just -- compromises were too much. >> what's the option, though? that's why the president -- why president clinton says, you know, you're going to cut off your nose to spite your face. >> i don't think so. there are some good things in this bill, but, you know, one of the problems is most people don't get insurance until 2014. insurance premiums will double between now and 2014. i'm not sure how we're going to afford all this if we continue down this path. >> all right. well, governor, we like seeing you in studio again because it's going to heat up, you know that. >> yeah, probably is. >> i don't know whether christmas eve, if we'll get it done by then, but will you be around? >> i'll be around. >> come on down and we'll see you in studio. i'm going to show you those posters. they're everywhere. see you later. >> there was a story, u.s. news about the show. >> he likes -- he says we don't -- >> eric cantor and governor dean
both like the show. >> much more than some of our competitors on at the same time, that we talked beryler. go ahead. that are more politically mocha. health care is not the only major issue on the president's plate. he's in copenhagen, trying to hammer out this deal on climate change. apparently, they did meet with the chinese and we're being told there were some signs of progress out of that meeting. we'll talk about that with david gregory. safety ratings. but only malibu has onstar. big deal. i'll just use my phone. let's say we crashed. whoops, you lost your phone and you're disoriented. i'm not disoriented. now you are. onstar automatic crash response can call to see if you're ok. onstar emergency. is everything ok howie? you don't answer, they can automatically send help to your exact location. i think i'll ride with you. the award-winning malibu. from chevy.
welcome back to "squawk box," everybody. as you can see, the futures are looking pretty strong this will morning ahead of what is a pretty volatile day on a quadruple witching friday. right now you're talking about dow futures up by about 55, 57 points above fair value. we've also been keeping an eye on crude oil prices because oil's been rising as well on some concerns about weather this weekend, also some middle east tensions as well. you can see, that's up. the president's in copenhagen for the climate summit. while on the home front the health care debate is taking fire from the right and left, as we just heard from governor dean. david gregory moderator of nbc's "meet the press." he joins us from d.c. jack etless.
>> i came in the right uniform. the end of the year in this process -- >> both wearing brown ties and blue shirts. >> it's the uniform. >> when in rome. we do that all the time, david, seriously when you're on "squawk." >> got it. >> copenhagen, is it cursed or what? for the second time in a matter of months now president goes, high expectations, the danger of coming back with nothing, first the olympics and now this. how's it going to turn out? >> i think there's still a lot of work to be done, both there and here. i mean, the president's meeting with chinese, going to meet with some other big powers and see if there's any consensus on what can be done. legislatively they're still a ways off here because so much attention being sucked up with the health care debate, which is at the final hour now with the president in copenhagen. i think that's where the focus is. the president had a very strong message over there today, that the united states will lead, it's time to act, type to stop talking. where the details are is still what's so elusive in terms of what the united states will agree to and what some of the
other powers will agree to. the point he did make, that just shows you how far back in some ways this debate has been set is to come out strongly to say this notion that this is not a real threat is silly. there has to be agreement on that. and then the next step has to be about what's going to be done about it. not whether it's a significant threat. >> yeah. shows you how intractable the problem is, getting all those nations together, our own senate limb taki limitations. the way things move in the united states. on health care, give us a sense of how this will go down. can they get something together by christmas eve, is that realistic? >> the hope and expectation is they can get a vote out of the senate by the 23rd. yes, by christmas eve, that they can cobble together the 60 votes in the senate and then have a very fast conference. whether that happens by the new year, i think, is a little suspect at this point. but the white house is obviously pushing very, very hard for that to happen. the big story on health care right now is what's happening within the democratic party.
you know, moderates and the liberals who want much more reform, who don't think this is -- this compromise lives up to what the president stood for. that fight has to be worked out. and this is the fight of a party in power, dealing with a problem that's really, really huge. and there's a reason why health care hasn't got done before. so i think if you look at some of our polling this week that shows a lot of americans are not as suspective of health care, think attacks are going to go up, don't think costs are going to come down, there's significant headwind this process is facing. this is where everybody has said, down the line, when it came to the final stretch, the president was going to have to exert leadership, privately and publicly to get it done. >> the spotlight has moved from olympia snowe to joe lieberman, now to ben nelson. is it going to come down to one or two people or is all that drama relative to the overall debate? >> it is going to come down to one or two people because that's
where they are. it's always been about the fight to get to 60. olympia snowe was thought to be key, and then lieberman, as you say, nelson. and then there's another piece of this, at least in sort of what's occupying the air, howard dean who will be on the program on sunday to sort of give us the final word on where he is at the end of a very fractious week of debate. it's not that progressives in the senate are not going to vote for this bill, but there is a real fight playing out publicly about what it means for the party, what it means ultimately for reform. and the president's in this position of having to kind of square the views of his progressives in the party versus the fact that health care reform is more universally unpopular, if you look at the polls, and that keeping those independent voters, who are leaving the democratic party on the eve of an election year because of the deficit, because of joblessness, because of the health care debate, creates a huge political
issue for him. >> so you have axelrod, governor dean and a lot more. >> our political round table, tavs smily, ed gillespie and we'll talk about the president's standing of the polls and where he is as he heads into year two. >> we look forward to that. joe, have you seen gregory's ratings lately? on fire. >> i did see. and how long is one of his competitors going to be there? he's doing bad breath and tiger now, isn't he? basically? >> i love it. david, we'll see you sunday. tune into nbc's "meet the press" sunday. check your local listings for times. >> he's trying to act -- did you see one of the reviews. it's like, this is not church, george, smile. it's a morning show. you shouldn't have -- >> dot cooking segment. >> do the cooking segment. put the sprinkles on. coming up, natural gas tauted as a clean energy solution to america's oil man but some environmentalist say that may not be the case.
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the opening bell. our guest host today is byron wien. is he the top strategist at blackstone. we've been talking with hip through the morning. weet get a little more on what he won't be putting in his top predictions for 2010 in a little bit. research in motion shares popping, after the maker of the very popular blackberry device posted better than expected earnings for the latest quarter. they did particularly well in international markets over the course of the quarter but that stock up by better than 10% this morning. take two interactive shares also worth watching after news that investor carl icahn now has an 11.3% stake in the company. an s.e.c. filing says he wants to talk with management, not surprising, because he never gets into these things quietly. the s.e.c. filing did not elaborate on that point. also, oil prices rising this morning. more forecasts of colder weather coming in the united states, maybe some storms in the northeast this weekend, too. plus some reports out of the middle east that say there was a brief incursion by iranian
troops on an iraqi oil field. right now, crude oil up by close to 2%, up to $74.04. next week we have to wait for more economic data but futures this morning are trying to get back what we lost yesterday. as sort of a slew of bad news from here and there, fedex and citi and the jobless claims, all converged on the market. peter yastro of -- do you want to help me with this? give me the name, peter. >> it's a hard, "g," guys. >> joins us from the cme in chicago. is this a new firm? did you open your own shop? >> yeah, we opened in the summer and my partner and tom and i have been working together for a long time. but bedecided to make it one entity this past summer. >> congratulations. >> we've had you on since this summer. that's the first time we've seen this name. >> no. joe picked up right away, guys. >> sorry. >> first time, joe got it right away. >> it's easier than
yastrow/quintanilla. that was your thinking. so tell me about the action today. we got quadruple witching going on. if no one's saying we're going to break out of the six-week range but will we see a couple fireworks? >> here's the big dilemma. you have us drifting sideways for almost a month. we haven't had a new high. momentum guys are starting to get concerned. if you're a bull and a momentum player, you should have had a higher high by now. it's been a month. they're starting to pull back. and this is also given the bears a lot of ammunition here. they're getting all excited. the problem with that is, we're coming into year end, it's been an amazing year where people are really out of the picture early. they've taken the money off the table. they've closed up the books for year end earlier than normal. and so i don't want to make too much of this lack of momentum or this sideways to downwards move. it could be a big bear trap because of the weekend year-end
participation. >> walk me past the new year. spell out the case for why money would be coming back in after january 1 and why it would not. >> well, i think the entire market could be summarized by interest rates and a search for yield. as we saw bond yields dramatically and then we saw the rally. if the fed's going to remain on hold and we're going to have very tame inflation expectations, then i think long-term rates will stay low and stocks remain the best place to put your money for 2010. >> is the dollar reflecting jitters about what the fed may or may not do in 2010, or is it just about the euro getting crushed on sovereign debt concerns? >> i think it's several things. obviously, the concerns with the euro are on the downgrades of greece is a big deal. and whenever anything scary happens anywhere in the globe, i think it makes a lot of sense and it's a very common practice to run to the safety of the two-year note in the united
states. and the united states, for all of our bashing and all of our negativism here and fun it is to poke holes in our government, we still have the best country by far and we still have the best financial system by far. we still have the most transparent system. we have the best reporters covering it as well. >> amen. >> amen. >> we are the best. >> we are not latvia, right? >> amen. we write that to each other all the time, don't we? >> and yastrow is one of the best. >> guys, can i point out one thing? if the summer of 1989 i interned at morgan stanley and one of my jobs was to run up markets to buy ron wien's office once or twice a week. i don't know if he remembers me or not, but i certainly remember him. >> thank you. i remember you. you're unforgettable. >> thank you. >> cream and sugar, that's what he mostly ordered? >> treated me well. >> cream and sugar.
>> yeah, don't look me in the eye. he's still like that. >> yeah. peter jastrow joining us from chicago. nike reporting stronger than expected earnings for q2. our emmy-award winning darren rovell -- this is a new development. ♪ >> i knew you'd get that in there. that has to do with some of your coverage of election nice for nbc news. congratulations. >> it was a brief appearance. >> how long are you home? >> 21 seconds, maybe. let's get to nike, beating the streets with shares. revenue fell 4% in line with the $4.4 billion number they were expecting. on the conference call nike executives told four big stories. continued weaken in the united states, but, remember, only one-third of the business is here. huge expectations for the world cup. nike is now the world's largest
soccer company and owns umbro as well. a burgeoning direct consumer business up 14% in the united states with better margins. finally, the hint of a new technology they'll launch something called fresh air. they only said it was an update to the current air cushioning system that can came out in the spring. there was talk about tiger, of course, ceo telling analysts on the conference call the company supported the maligned golfer and cautioned the golf business is already hurt by the economy but there's optimism in the future. researchers telling cnbc that 10% of nike's golf business has tiger's t.w. logo on it which appears to be the most exposed staying on the shelves, not selling. one analyst asked parker if what happens with tiger gives nike pause on spending money on athletes, parker saying the relationship we have with athletes and teams are really critical to developing insights that we need to fuel the product
innovation that we really distinguishes us in the marketplace. the street liked what he had saw, shares went 2% after hours. >> did you see on your pick up of the interview? it was all over the papers today. >> it was nice. >> i saw it in "the journal," did they interview him also? did you see it? >> i did the interview. he did a conference call. >> oh, de? >> okay. i thought they just blatantly -- >> they didn't rip me off. >> okay. because they do that. but they didn't -- >> joe's got your back. >> i was furious. i'm looking, where is rovell, because he didn't -- he did do a conference call. you were the only one who was face to face. >> we got a lot of press. on the conference call he was a little more -- he said a little more about, we realize it's a little bit of a problem. >> i didn't see it. did you ask him about the "saturday night live" intro? >> yes. he says he does not have a flask on his desk. the impression was not too good. the only thing they got right was the tie. >> did he wear his tie on his head? >> no, but the color of the tie
and the stripes. >> i thought you meant on his head. if he showed up to the interview, that would have shown a lot -- that would have been a good sense of humor. hulu, which is owned by -- >> and disney and cnbc are partners. >> yes. coming up, where all the witches of wall street mean for the trading day. they say natural gas is the cleanest fossil fuel out there but don't tell small town usa that. are you ordering bottled water when you go out now? >> i -- yeah, i usually do. >> you always do? >> sparkling water. >> you've read way too much. >> i forget sometimes and i drink tap accidentally. >> we'll debate the issue next on "squawk."
take a look at the futures. you'll see futures are up, not as much as they had been a little earlier this morning, but still talking about futures up by 47 points above fair value. remember, it's quadruple witching day. that keyed to volatility. the president in copenhagen this morning, he emphasized the need for all major economies to reduce carbon emissions. >> we've taken bold action at home. by making historic investments in renewable energy, by putting our people to work, increasing efficiency in our homes and buildings, and by persuing comprehensive legislation to transform to a clean energy
economy. >> clean energy, a big buzz word. the natural gas industry is coming under fire for some drilling methods. joining us is bruce vincent, chairman of independent drilling industry and jim of state climate initiatives and state attorney for the environmental defense funds. jim, why don't you lay out for us what you see happening in the drilling industry and why you're concerned. >> well, the natural gas industry has a great opportunity to help us solve the problem of climate change. and, fortunately, some companies in some locations are causing some problems both with regard to air emissions and water. so we're hoping to work with the industry to help reduce their adverse impacts. >> how significant of a problem do you think it is, jim? >> well, it varies from place to place. i mean, there are some communities where there's some testing that seemed like we had significant air pollution problems. and some threats to water supply. but right now we've not had a
serious problem yet in terms of water. but we've got to wash that. >> bruce, what about you? what do you see happening and is this a problem? is it something that needs to be addressed? >> well, clearly the natural gas industry can play a significant role as we move towards a better environment for our grandchildren. it can also play a role today in job creation, it can also play a role today in energy security for our country. and many of these methods, hydraulic fraction as an example under attack today, has been used by the industry for a long, long time. that particular technology has been used for 60 years. over that period of time there's not a known case where it's contaminated freshwater aq aquafores. how does it work? >> it's a mechanism that basically unlocks resources in the ground. perhaps a simple analogy, we've all been to the beach before. if you're sitting in that kind of area of the beach where the tide moves in and out.
as the water comes in, the water fills the porous basin and fills it up. if you push your fist down there, you might see cracks radiate out from that tarl area. that's essentially what it is. it's like a hammer that fractures the rock and that unlocks resources in the rock. and it's been the key technology in unlocking these shale gas resources that many people have heard about. where today we had a natural gas resource base in america over 100 years in length. we're the saudi arabia of natural gas in the world. it's abundant, affordable, reliable, and it's american. >> but it's the hydraulic fracturing that allows you to get at assets that you wouldn't have been able to otherwise? >> it's a combination of that and horizontal drilling. both are key technologies but both have been around for some time. the key additional technology that's allowed us to get at those in an ability to conduct these hydraulic fractures
stimulations multiple times in a horizontal well bore. that's what make it economic, commercial, viable. these shale gas resources are many places in the country. because of activity they've created a lot of jobs and economic well-being in those areas. >> how concerned are you about hydraulic fracturing? you don't sound incredibly concerned but how many problems have you seen in the past? >> i agree with bruce that some of the problems we're seeing with regard to natural gas production are not related to frakking. they're related to other types of operations or -- with regar , to the way casing is put it inspect fracking is not something we have to fear but we do think you have to do it right. there's some -- we can do fracking with chemicals, other than the most hazardous ones. we also need to do the drilling
in the shale formations in the right place. >> but i guess the question is, do you think there needs to be federal regular layitions of th procedures? that's the sticking point, right? >> we're hoping states will step up and really fulfill their responsibility. if so, we may not need federal regulations. if states don't do their jobs, then the federal government may have to weigh in. but we're hoping we don't have to do that. frankly, we're hoping the industry working with us and other groups will also make improvements voluntarily. >> bruce, what do you think would happen if there is this federal regulation of some of these procedures? what's it going to mean to your members? >> first off, i absolutely agree with jim. the industry want to do it right. we want to work with groups like his to do it right. we think we've been doing it right for a long time. you can always work on improving things. what federal regulation would do
would lay an additional burden of regulation that would both cost time and money. but also provide an avenue where other groups, special interest grou groups, could throw up roadblocks. the states are regulated these efforts for decades and they've regulated them effectively. and we think that's the place that they should be regulated. some of these, like water issues, and jim mentioned that, are issues. but the water issues are different in pennsylvania and new york, say, than they are in texas or colorado or wyoming. so the states are the ones that recognize those water issues particular to their state. that's where the regulation ought to be. you know, a good simple analogy for that is driver's licenses. we're all licensed in our states. other states recognize those licenses. there are still bad drivers, still accidents, but is there an need for a additional federal driving test we take and regulation? obviously, there's not. the cost benefits analysis doesn't make sense to do that.
we think the same thing with regard to hydraulic fracturing, water design, et cetera. >> thank you for your time. appreciate it. >> happy holidays. when we come back, it is quadruple witching friday, the last of the year. what does that mean for the trading day ahead? we'll talk to art cashin next. first -- look at all those witches on wall street. first, let's check on the dollar as we go to break. the euro at 143.29.
time for the trader's edge. art is director of floor operations. happy friday to you, art. >> very happy friday to you, too. >> are you more interested in the dollar equity relationship today or witching or what? >> well, you know, the witching will play out. you get kind of barbell trading. big at the open and then big at the close and then in the middle sheer boredom. so, yeah, we'll be watching the dollar pretty closely. it's velocity that's important. yesterday was a very sharp move and had such an fluns on things. >> you write this morning about
the guy that mike santolli wrote about last week. he's i guess arguing what? you could see a dramatic move up before an ultimate resolution down or vice versa or what? >> if i read the snippets mike passed along to me, the gentleman writing back on december 7th or so said that the market is stuck in this consolidation phase that we have been talking about, the narrow range i discussed with joe yesterday. and that that often precreeds a major move. his particular leaning is that it will be a major move to the upside but what struck me is he was looking for a potential head fake selloff, if you would. the markets confuse people by dipping down and he pick add number of 1080. yesterday's number was 1095. we'll wait to see if it plays
up. >> he's not giving up the name. turning into a little -- like deep throat on wall street in a way. >> yeah, well, no. it is interesting and mike either accidentally or purposely causing a lot of chatter in the barrooms around wall street as people try to speculate who it might be. >> you would know about that. >> i do a lot of research. >> art, good weekend. >> okay. i'll be marinating ice cubes, thank you. any surprises for 2010? we'll see if our guest will tip his hand for the new year. he's been teasing us all morning. a very quick break, first though, gold prices this morning. well-informed people are considering chevy malibu. you a cop? no. you didn't hear from me, but this malibu is a best buy. i heard that from consumers digest. it offers better highway mileage than a comparable camry or accord. estimated 33 highway. i saw that on the epa site.
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byron wean. this is your time. >> help me. that is critical time. i need your help and nobody's help i would respect more than theirs. >> thank you, thank you. sarca sarcasm. >> i'm thinking about not using one for oil. i had a surprise of oil at 80 and it did. and now i'm trying to think of whether i should include oil and pretty much rejected the idea. >> lard to find a consensus. what is the consensus. >> up, i think. >> up. >> there are plenty of people on the downside. >> how about gold? gold is another one i'm having trouble with. targeted gold for 1200. hit that. that would be the surprise for gold? going to 1500? i don't think that would be a surprise. >> that would surprise me because i think the dollar's strengthening now. >> i disagree. i think 1350, 1500. >> below a thousand.
>> you're betting on the fed being able to control -- >> yeah. betting on the dollar going better. i'm betting on -- i think that was another bubble, another oil. >> but you guys are an example of the dilemma i have because there are a lot of people on both sides so what would be the surprise? that's what i'm having trouble with. >> when you came on a year ago and told us about -- a year ago january and told us your calls, there were out there calls at the point abe right on a lot of different numbers. >> yeah. i'm never going to have a year like 2009. you know? but then it was a little easier because everybody was bearish. it was a very negative mood. if i was willing to be positive on oil, on gold, on the market itself, on china, you know, those were big calls at that time. >> when will tiger play? >> i don't know anything about that. you know? >> the biggest surprise. the biggest surprise is if he took the year off. he's got to keep trying to get
the majors. not for nothing. >> he is 33. he has 30 more years to play. >> i know, i know. but he is the best ever and he needs to -- that needs to be definitive. he could be hurt. >> the half life of american life is very short. >> a-rod. >> you can do a lot of bad things if you're an athlete. >> not criminal things. he lives with the choices. >> we had a president of the united states with a serious press attention for -- >> i know. that was my person of the year, a long-suffering wife. elizabeth edwards. hillary clinton. sanford. spitzer. a composite of time on. that we have seen it so many times, every athlete's wife almost. >> tiger will play in the summer. >> he's got to play in july. got play at the u.s. open. pebble beach. >> that's after the masters. that's after april. >> yeah. >> playing in the summer. >> it is a business story. if you think it didn't.
>> huge. always a great time. >> great to be here. >> join us on monday, "squawk on the trestreet's" coming up next. hi, from the financial capital of the world in the heart of lower manhattan, this is "squawk on the street." on the friday before the first shortened holiday week. good morning, everyone. >> very good morning to you. the dollar stabilize. risky assets back in focus. quadruple witching ahead of us. volatility could be high or nothing at all. >> that is the beauty of the witching friday. with such a good name, might be worth it. >> we're looking for rebound after we lost 1.8% on the dow jones industrial average after the last 3 sessions. the dollar is stuck. asia was down and europe has been able to rebound so things are looking positive and good tech earnings, of course. >> that's right. research in motion surging.
some people are buying the blackberries. president obama, a bit frustrated at the copenhagen climate summit today. more on that coming up. oil a very big story right now. we heard it earl think morning. reports first out of a middle eastern television outlet that iranian troops crossed into southeastern iraq which would be all the way down at the bottom there, somewhat probably near basra. about 280 miles south of baghdad. and took over an oil field. oil shot up. iraq says they weren't attacked but people there say they were. iraq doesn't want people to think they were. this is a sort of interesting -- >> it is interesting but incursions like that happen. it's no lines in the desert. you know? >> right. >> people go in and out of territory all the time but we watch it. the market could take it and run with it. >> all right. and rocking -- that's part of the background, tension